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Investor Insight: When single-family is the way to go

Single-family homes are getting a bad rap from some investors pointing to high prices and cash-flow challenges. But they continue to serve a purpose and are just right in some markets and for some people.

Video transcript below:

Jemima Codrington: Tried, trusted and true single family dwellings continue to remain a popular buy and hold choice for investors. So what’s behind the enduring appeal and is one right for you? We find out with this week’s Investor Insight on Crew TV.

With the condo market on the receiving end of a lukewarm reception from some investors, interest is returning to single family homes. Experts cite two main reasons to consider adding one to your portfolio.

Isaac Olowolafe, President and CEO, Dream Fund HoldingsIsaac Olowolafe: So the main reason is to buy a single family home as a long term investment is if you are buying in two different ways. If you are buying in key locations, where there is still lot of growth happening, so for example the subway coming into Woodbridge, if you are buying around the subway, those are key investments that you could buy and hoard over long term and another side is if you are buying a pre construction at a price below the current market value. Once it’s built, closing it and renting it out in the long term.

Jemima Codrington: Investors need not stay north of the border in hopes of deal. On the road to recovery, post housing crash, the US is home to several income producing single family homes.

Matt Bowles, Partner, Maverick Investor GroupsMatt Bowles: In 2012 Warren Buffet himself said that he felt that single family homes in the United States were about the best investment that someone could make. In large part that’s because we had a huge real estate crash and now we are just on the verge of a very vibrant recovery.

Private equity funds in the US are putting billions of dollars into buying up the single family inventory, which is driving prices up quickly and dramatically. So Canadians have a unique opportunity this year to buy single family homes in a path of growth and benefit from that wave and then have an exit strategy a few years down the road.